Indian mkt will be 'very, very volatile' in 2014: Analyst

Indian stocks are likely to head into a correction starting 2014, which could last for at least one, or more, quarters, according to KR Bharat, MD, Advent Advisors.

As part of a global equity rally, Indian shares have logged about 7 percent year-to-date, and are currently perched close to their all-time highs. But the rally was largely driven by easy liquidity sloshing around because of the loose monetary policies of the US Federal Reserve and other central banks, Bharat told CNBC-TV18 in a discussion.

As a result, as the Fed starts to unwind its stimulus that it unveiled in the aftermath of the 2008 financial crisis, stocks will take a hit, he said, adding that the Fed could wind down its monetary stimulus by late 2014 or early 2015.

"So the liquidity flows that played a large role in the 2013 rally will not play the same role in 2014 and if India is to witness good equity performance, it has to be on the basis of strong fundamentals of the Indian economy and I think we are a fair distance from that," he said.

"Indian equities could correct for the first quarter of 2014 or all the way through two or three quarters, before beginning a sustained bull market rally towards the end of 2014," Bharat said.

Also read: 2013 in review: Pharma's year of quality woes

Go easy on equities

When asked what strategy investors could adopt in an environment where his prognosis comes true, he said individual investors' allocation to stocks could be 10-20 percent, which could be increased to 50-60 percent towards the end of 2014.

Even this year, developed markets such as US have outperformed Indian markets – the S&P 500 has clocked a 30 percent gain -- and Bharat believes the outperformance is likely to continue into 2014. "Even within emerging markets, stocks in countries like Malaysia, Indonesia, Vietnam, Taiwan, which are making fairly significant strides [are likely to do well]."

Volatility could also increase thanks to the central-government elections due to take place in May next year, Bharat said. "For every single opinion poll starting from the end of February, people are going to come up with different outcomes and with the publication of each these polls you are going to have huge volatility."

"So the only thing you can say with certainty about 2014: It is going to be very, very volatile."

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Will nation accept Narendra Modi's strong note of anguish?

R Jagannathan
Firstpost.com

Will the nation accept Narendra Modi's very strong note of "anguish" over 2002 and move on? Will his deep statement of "grief" be an electoral game-changer in 2014?

The nation will tell us what the majority think in May 2014. For, when it comes to Modi, the reaction is always black or white. Reactions are binary: Like/Dislike. Those who like him, will accept anything he says. Those who dislike him will find ways to dismiss what is probably his strongest near-apology about the Gujarat communal rioting under his watch as not good enough (read his full statement here ).

However, at the very least it proves one thing: his " puppy " analogy, used in a July interview to describe the unfortunate deaths in 2002, and widely criticised as insensitive, now appears to have been a case of poor articulation. His statement about his feelings at that time have been described in his blog today. There are no gaffes in it, indicating that Modi is making a real effort to reach out to Muslims indirectly. He said: "'Grief, sadness, misery, pain, anguish, agony – mere words could not capture the absolute emptiness one felt on witnessing such inhumanity." If it succeeds in dispelling the strong antipathy of Muslims towards him, it will have have served its political purpose.

However, the statement will be seen differently by Modi-bhakts and Modi-baiters.

For too many of the latter kind, justice for 2002 has come to mean putting Modi in jail, and not the conviction and sentencing of the guilty in various cases. There are over a hundred convictions now, including many carrying life sentences, but for the Left-Liberal caucus in Delhi, the crimes of 2002 are only about Modi.

Those who hate him, including those who have been demanding an apology in the hope that he won't do any such thing, have now raised the bar, now that he has expressed words of some contrition. What he said does not even sound like an apology, some will say. Others will pooh-pooh it, and wonder how "anguish" expressed after 11 years can be counted as the real thing.

Some will contrast what Modi said with what Manmohan Singh said about the 1984 anti-Sikh killings – 21 years later in 2005. Modi said he "was shaken to the core" by the events of 2002.

Manmohan Singh, on the other hand, said it with fewer words, but it was a clear apology . "I have no hesitation in apologising to the Sikh community. I apologise not only to the Sikh community, but to the whole Indian nation because what took place in 1984 is the negation of the concept of nationhood enshrined in our Constitution."

So, in formal terms, Singh's was a fuller apology than Modi's. It said a clear sorry.

But did it bring any closure? A close examination does not show this to be true. The apology came not only 21 years after the event, but from a Sikh prime minister who had nothing to do with it. It came not from the Congress party or the Gandhi family, but their appointed caretaker.

Unlike the Gujarat cases, the Sikh killings have not resulted in any kind of significant convictions of the perpetrators. This, even though the casualties were more than twice as high as in Gujarat. The distribution of casualties heavily one-sided in 1984 -- with only Sikhs being killed. The Gujarat riots saw more people die from police firings than through communal targeting –- suggesting that policing was not entirely abandoned. In 1984, they were.

Another point of difference is this: in 1984, Rajiv Gandhi campaigned for the Congress by tapping into the anti-Sikh sentiment that was prevalent after the assassination of Indira Gandhi. The elections were held barely two months after the assassination, and so even the Election Commission helped Rajiv achieve a huge sympathy wave.

In 2002, Modi campaigned on a veiled anti-minority plank, but the Election Commission delayed the elections to the Gujarat assembly for well over six months in order to avoid giving people a chance to vote in anger. But Modi still won hands down.

But despite a continuous barrage of court cases and media criticism, all of which he weathered, we still find only Modi in the dock, despite a near-apology or expressions of pain and anguish.

Quite clearly, the bar will be raised continuously for Modi.

However, there is a difference between the phony Delhi consensus against accepting a Modi apology and how the ordinary Indian Muslim will view it. Most Muslims may still not vote for him, but many of them will probably accept that the Modi of 2014 is not the same Modi as 2002.

The big question is how this impacts their voting patterns.This is really the biggest question of 2014, not whether Modi will win. If many Muslims find the near-apology sincere enough, 2014 will be a game-changing election.

�The writer is editor-in-chief, digital and publishing, Network18 Group

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Kejriwal allocates portfolios, retains power, finance

Chief Minister Arvind Kejriwal today allocated portfolios to his six Cabinet colleagues while keeping key departments of Home, Finance, Power and Vigilance with himself. The Chief Minister will also keep Planning, Services and all other departments not allocated to the Ministers. Manish Sisodia, considered close to Kejriwal, has been given the charges of Revenue, PWD, Urban Development, Education, Higher Education, Local Bodies and Land and Building departments.

In his first press conference after being sworn-in as the Chief Minister, Kejriwal said Somnath Bharti, a postgraduate from IIT Delhi, will take the charge of Administrative Reforms, Law, Tourism and Culture. Administrative Reforms is high on Kejriwal's agenda with efforts to decentralise power and establish the Mohalla Sabha. The department is also likely to take steps to bring an end to the VIP culture and also provide time bound and efficient services to the people.

Also Read: Kejriwal may be closer to the left than you thought

The youngest Minister in Kejriwal's Cabinet, Rakhi Birla will handle Social Welfare and Women and Child Development departments. She has also been given the additional charge to formulate steps required for enhancing security of women. Girish Soni has been given charge of Labour, Development Skill Development and SC/ST departments. Satyendra Jain has been allocated Health, Industries and Gurudwara Elections. Kejriwal said a Cabinet meeting in the afternoon will decide the dates for convening the assembly as well as possible steps to end VIP culture in the city.

"We will discuss three issues in the Cabinet which include finalising date to convene the assembly, steps required to end VIP culture like restricting use of red beacons and security by government officials and MLAs in Delhi," he said. Kejriwal said he will have separate meetings with officials from Power and Transport departments, Indraprastha Gas Ltd , Delhi Jal Board. He said he will also meet Delhi Police Commissioner B S Bassi. The Chief Minister said, if required, he will hold a second Cabinet meeting later in the evening.

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Green Laws: Is India in line with rest of the world?

Two successive environment ministers in the UPA cabinet have been seen as obstructive of investments. Is India Inc unable to come to terms with environmental costs or is the ministry being unreasonable?

According to environment ministry's website, 72 coal mining projects are awaiting environmental clearance, out of which only nine came in 2013. The rest of them are pending for over a year. Ninety one mining projects awaiting environment clearance, only 25 came in this year. 118 industrial projects awaiting environment clearance, only 13 came in this year.

If one does the math, 83 percent of the projects have waited well over one year. That's the number of projects awaiting environment clearance, more than double that number of projects at any point in time await terms of reference from the ministry. Why this inordinate delay in clearance? Aren't there well laid out standards in most industries? Is the delay on account of haggling by the industry which doesn't want to meet its obligations or is unable to understand the obligations or is it that the administration is either incompetent or the wrong people are in the assessment space?

Former Environment Secretary and currently with TERI Pradipto Ghosh and Seshagiri Rao, Group CFO at JSW Steel, discuss the issue on CNBC-TV18.

Also Read: No files will be kept pending in Environment Min: Moily

Below is the edited interview transcript

Q: Quickly if you can tell us what is a typical process that a project travels from the moment it enters the environment ministry to its final disposal?

Ghosh: We are talking about the category A projects that is projects which are required to be appraised at the level of these central government. And there are other projects which are cleared at the level of the states. We are talking about the ones which require clearance at the central level.

The process starts with the proponent submitting an application with a check list of the impacts of the proposed project to the ministry, which in turn submits it to the notified expert group. The expert group in consultation with the proponent and their consultants, develop the terms of reference for the environmental impact assessment (EIA) study.

We need to understand that the EIA study is not a checklist which is tick-marked. It is a detailed technical examination which requires a year to produce and which typically is about 400-500 pages long.If this seems onerous, let me clarify that this is the worldwide practice, whether it is in the US, whether it is in Europe, whether it is in Australia, it is exactly the same kind of document.

Then once the proponent has prepared the EIA document, and I must emphasize it is up to the proponent to prepare it, it is then submitted to the environment ministry and the expert committee has a 145 days to deliberate upon it in consultation with the project proponent and their consultants. Then at the closer of the period of 145 days they are supposed to send their recommendation within 15 days to the regulator, which happens to be the ministry.

Then the ministry, which includes the minister concerned, can take another 45 days to take a final decision and of course if the ministry does not take a final decision at the level of minister within 45 days then the project proponent is deemed to have got environment clearance in clear legal terms on the basis of the minutes of the expert committee's deliberation.

So this is the process in short. Now in the course of this conversation I can point out to some of the reasons why it takes longer than that by way of comparison. The notified period in the World Bank for their own projects after submission of the EIA is one year, the notified period in the case of Canada is two years and this is -- in two years ago -- after they had comprehensively overhauled that environment clearance system. So the Indian system -- the way it is designed to work is not out of line by any means with the worldwide practice.

Q: If it is a 145 days or maybe 200 days at best that the ministry should take after a proposal is submitted for environment clearance, my numbers show that out of some 300-odd projects only 85 have come in this year, clearly many projects are waiting for well-over 365 days to get environmental clearance. I am sure you must have gone through environmental clearances for many of your projects, where is the bottleneck?

Rao: As Dr Ghosh has explained there are category A and category B. So in the case of category A, the steps, which are involved, either for getting approval of expert appraisal committee (EAC) for terms of reference (TOR) and then preparing an environmental impact assessment report and then doing a public hearing. After public hearing again approaching environmental clearance and if at all it is located in the forest again forest 1 clearance, forest 2 clearance is a prerequisite for environmental clearance. There is no time limit for the forest clearances.

After the forest clearance, it is referred for environmental clearance, if it is located near the wildlife sanctuary or any such area, wildlife departmental approval is required. That takes time. So if you see the whole process which is involved, it is not parallel, it is sequential. There is no single window clearance. If there is a problem at one stage then the project gets delayed.

Q: Is that the only issue that it is not parallely done, these several clearances, or is it that even otherwise there is an unconscionably long time?

Rao: It is unconscionably long time why I am saying again in a public hearing for instance if you have to have a public hearing, in my view, it should be restricted only to the items which are there in the environmental impact assessment study and will impact the environment. Today public consultation when it is happening, first the people who are not affected, outsiders will come to the public hearing, they also raise irrelevant issues which are nowhere connected with the project nor EIA. So all those grievances sought to be addressed before again we approach back, based on the minutes of the public hearing.

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World powers, Iran to resume expert nuclear talks on Dec 30

Experts from Iran and six world powers will resume talks on Monday on how to roll out last month's landmark nuclear deal in Geneva, hoping to resolve numerous technical issues before the accord can take effect.

A spokeswoman for European Union foreign policy chief Catherine Ashton, who oversees diplomacy with Iran on behalf of the United States, Russia, China, France, Britain and Germany, said talks were scheduled to last one day for now.

Two rounds of negotiations have been held so far since Iran agreed on November 24 to curb its most sensitive nuclear work in return for relief from some economic sanctions that are damaging its oil-dependent economy.

In comments that highlight the challenges facing negotiators, Iran's nuclear chief said on Friday Tehran was pressing on with tests of more efficient uranium enrichment technology. His comments appeared aimed at soothing the anger of Iranian hardliners over possible new U.S. sanctions on Iran.

Also Read: UN General Assembly approves $5.5bn budget for 2014/15

The nuclear experts have to work out when the deal will be implemented, triggering the loosening of economic restrictions by the EU and the United States.

A key sticking point appears to be what information Western governments will receive in advance to verify that Iran is meeting its end of the deal before they lift some sanctions.

Other outstanding issues address how exactly sanctions will be eased and practical details of Iranian concessions.

Some diplomats from the six nations have said they hoped the deal could be put fully in place by the second half of January.

The talks resume at a sensitive time. Iranian hardliners, irked by the foreign policy shift since moderate President Hasan Rouhani was elected in June, oppose the Geneva deal and call it "a surrender to America's pressure" by the government.

A group of 100 hardline Iranian lawmakers are seeking to oblige the government to increase uranium enrichment to 60 percent, a level that can produce bomb-grade material if enriched further, if new U.S. sanctions are imposed on Tehran.

It is not clear if the bill will be debated in Iran's 290-seat parliament as the country's most powerful authority, Supreme Leader Ayatollah Ali Khamenei, has repeatedly backed the Geneva talks. If approved, the bill would have to be ratified by a constitutional watchdog body to become law.

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Iranian lawmakers said their bill was a response to "America's hostile measures", referring to legislation introduced by 26 U.S. senators last week to impose new sanctions on Iran if the Islamic Republic breaks the Geneva deal.

A hardline Iranian MP said the process could be derailed if the U.S. lawmakers imposed the tougher curbs despite the Obama administration's opposition.

"Ratification of such a bill could put an end to nuclear negotiations and Tehran may opt not to continue negotiations in the wake of such sanctions," said the deputy head of the Iranian parliament's National Security and Foreign Policy Committee, Mansour Haqhiqhatpour, Press TV reported.

The proposed U.S. legislation would require reductions in Iran's petroleum production and apply new penalties to Iran's engineering, mining and construction industries.

To calm the hardliners, nuclear chief Ali Akbar Salehi said Tehran was testing more efficient uranium enrichment technology by building a new generation of centrifuges - machines that spin at supersonic speed to increase the ratio of the fissile isotope that could enable it to refine uranium much faster.

Although the development does not appear to contravene the Geneva accord, it may worry the major powers who are trying to curb the Islamic state's nuclear programme.

"The new generation of centrifuges is under development. However, tests should be completed before mass production of the centrifuges," Press TV quoted Salehi as saying.

Salehi also said Iran had a total of 19,000 centrifuges, without elaborating on how many were operational.

A spokesman for Iran's Atomic Energy Organisation announced on December 7 that initial testing on a new generation of more sophisticated centrifuges had been completed.

Iran rejects Western fears that its nuclear work has any military intentions and says it needs nuclear power for electricity generation and medical research.

The November 24 deal is meant to give the six powers time to negotiate a final settlement with Iran that will put an end to the decade-old standoff and ease worries over a new war in the Middle East.

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Raghuram Rajan: Destiny's child or beginner's luck?

The year 2013 saw one man take the entire nation by storm. No, we are not taking about movie-stars or cricketers, but Raghuram Rajan - one of the youngest governors of the Reserve Bank of India (RBI). A man who's every move, pun intended, has been watched by the markets, the media and the ministry, CNBC-TV18's Gopika Gopakumar shares details.

Call him the James Bond of banking or the Chennai Express of markets, this year's most desirable Indian could be none other than Dr Raghuram Rajan, the 23rd governor of RBI.

No other central banker in this country has ever received such an ostentatious reception on his arrival than governor Rajan. From his looks to his academic degrees, to being the oracle of the global financial crisis, markets and media have drooled over the messianic quality of this new governor. On his first day first show, governor Rajan stunned the markets by announcing a blitzkrieg of measures liberalising financial markets and banking sector. From the beginning, he made his priorities very clear.

Also Read: Never bet against RBI, it can hurt you: Rajan to traders

Raghuram Rajan, Governor, RBI said "To the existing traditions of the RBI, which will be the bedrock of our work, we will emphasise two other traditions that become important in these times: transparency and predictability."

But predictability was never governor Rajan's last name. On two occasions he took market by surprise with a 25 bps hike in the September mid-quarter review and an unexpected pause in the December review. But that, he said, was his style of policymaking.

But nobody is complaining about governor Rajan's style just yet, maybe, because he has been lucky, logical and successful with his first challenge - the rupee. Rajan opened a special window to allow banks to swap dollar deposits at below market rates. This enabled RBI to garner around USD 34 billion for the country.

Even as he arranged for flows, he removed the big dollar demand from oil companies from the market by opening a special swap window with oil marketing companies. This reduced demand for dollars by USD 300-400 million a day. The rupee that slid by 21 percent in the fifteen weeks before Rajan took over; rose 7 percent in the fifteen weeks after Rajan took over.

Rajan has since turned his attention to the next biggest challenge for RBI and for the country: loan defaults or bad loans of banks. He has released a discussion paper on early recognition of non-performing assets (NPA) and faster restructuring.

On September 4, 2013, Rajan said "Promoters do not have a divine right to stay in charge regardless of how badly they mismanage an enterprise, nor do they have the right to use the banking system to recapitalise their failed ventures."

Whether he's destiny's child or its just beginner's luck, governor Rajan has turned out to be lucky for India so far. But the recent pause on rate hike has left the market wondering whether he is pushing his luck too much. Come January, market will get to know whether he missed an opportunity to hike rates or whether he knows the economy much better than any of us.

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UN General Assembly approves $5.5bn budget for 2014/15

The United Nations General Assembly on Friday approved a $5.53 billion U.N. budget for 2014-2015, down 1 percent from the total spending during the previous two years.

The new biennial budget includes a 2 percent staffing cut, or some 221 posts, and a one year freeze in staff compensation.

The so-called core UN budget that was adopted does not include peacekeeping, currently running at over USD 7 billion a year and approved in separate negotiations, or the costs of several major UN.agencies funded by voluntary contributions from member states.

As in past years, the biennial budget negotiations were marked by a tussle between poor countries seeking to raise UN development spending and major developed countries, which are the biggest budget contributors, trying to rein in the figures as they struggle to reduce expenditures in their own national budgets.

Fiji's UN Ambassador Peter Thomson, speaking on behalf of the Group of 77 developing nations, said the 2014-2015 budget "represents the best that we as member states can muster at this time of continuing austerity in the world economy."

He said the G77 bloc supported the budget "with deep concern that budgetary austerity may negatively effect the development pillar of the work of the United Nations."

Critics of the United Nations, especially in the United States, have long charged that it is a bloated and sometimes corrupt bureaucracy that wastes taxpayers' money.

US Deputy Ambassador Joe Torsella, who focuses on UN management and reform at the US mission, said the 2014-2015 budget marked a "new commitment to real fiscal discipline at the United Nations at a tough time for hardworking families around the world."

"Our shared goal should be to ensure that the United Nations can maximize the results that it delivers with the amount of resources that member states are collectively able to provide," Torsella said.

The United States, which pays 22 percent of the UN budget, is the biggest financial contributor to the United Nations.

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Here's a look at the best ads of 2013

Dec 28, 2013, 04.07 PM IST

Advertising may not be the only tool to market brands but it is definitely the one that people easily connect to.

Tags  Advertising, brands, commercials, Ogilvy, Piyush Pandey, Lowe, R Balki

Like this story, share it with millions of investors on M3

Here's a look at the best ads of 2013

Advertising may not be the only tool to market brands but it is definitely the one that people easily connect to.

Like this story, share it with millions of investors on M3

Here's a look at the best ads of 2013

Advertising may not be the only tool to market brands but it is definitely the one that people easily connect to.

Share  .  Email  .  Print  .  A+A-

Advertising may not be the only tool to market brands but it is definitely the one that people easily connect to.

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Places to dine on New Year`s Eve

Mumbai

Go the Whole Hog@Sofitel

This New Year's there's a feast for every kind of foodie at Bandra Sofitel. Buffet junkies can settle in at Jyran. The kids can party on in Pondicherry Café, and vegeterians can have their senses awakened at  Tuskers.
 

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A snow clad New Year’s eve in Shimla

After a white Christmas, it's time for a snow clad New Years in Shimla, adding to the delight of tourists flocking the hill stations of Himachal Pradesh. Few other places in the state such as Kullu, Manali, Rohtang Pass, Lahaul and Spiti will also receive snowfall.

A fairly good Western Disturbance will start affecting weather from today onwards and will bring snow and rain in the lower hills just before the New Year's celebrations. At present the maximum and minimum temperatures in Shimla are 13 degrees and 1 degree, respectively.

Tourists here should start bracing up for cold wave conditions as night temperatures may fall to sub-zero levels. Day temperature in Shimla will come down below 5 degrees. We expect a cloud cover in another 24 hours, gradually reducing the diurnal variation of temperatures. Hoteliers here are hoping that tourists will throng in large numbers, ahead of New Year's.

picture courtesy- wespeaknews

By: Skymetweather.com

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